Polkadot (DOT) Faces Price Consolidation: Is a Downtrend Imminent?
• The RSI is no longer overbought, which could indicate price consolidation ahead.
• Polkadot Development Activity has decreased for 13 days in a row.
• The EMA lines formed a death cross recently, reinforcing that a bullish trend is not in sight.
Polkadot’s (DOT) latest indicators signal potential price consolidation is coming. A bearish death cross just formed in the price chart, reinforcing that a bullish trend shouldn’t appear soon.
Development Activity has decreased for 13 days in a row, indicating that DOT is losing its momentum. These metrics, alongside RSI , suggest that Polkadot’s price support level at $8.30 could be tested soon.
Development Activity Has Decreased for 13 Days in a Row Historically, DOT Development Activity was pretty correlated with its price. However, in 2024, it’s possible to see a moment where this correlation is detached. Between January 14 to January 31, Development Activity grew by 8.45%. However, in that same period, the DOT price went from $7.33 to $6.64.
Then, between February 11 and February 19, we had another occurrence of that phenomenon. DOT price grew from $7.01 to $8.03. At the same time, Development Activity decreased by 12%. This detachment between these two metrics indicates that DOT price had all that growth in 2024 – from $8.60 on January 1 to $11.6 on March 13 – due to external factors. These factors could not be directly related to its fundamentals, such as the overall crypto bull run.
However, even if that happens sometimes, usually the development activity is a good proxy for price movement. Development activity on this layer-0 blockchain has been decreasing for the last 13 days in a row. This indicates that the network is not able to keep its momentum and attract builders. This could deeply affect its price as the network loses its momentum and buyers move on to other assets.